Business

Thornton-based Ultimate Electronics filed for Chapter 11 bankruptcy reorganization January 7, 2011. Its the second trip to bankruptcy court in six years for the company. John Leyba, The Denver Post (THE DENVER POST | JOHN LEYBA)

One of Colorado's biggest electronics retailers is set to go on the chopping block after Ultimate Electronics asked a federal bankruptcy court on Friday for permission to conduct store closing sales at all 46 locations in order to pay back substantial debts.

Headquartered in Thornton and operating nine stores in the state, Ultimate Electronics filed for Chapter 11 on Jan. 26 in U.S. Bankruptcy Court in Delaware, where the store's parent company, Ultimate Acquisitions LLC, is incorporated.

In a motion last Friday, the company noted a downturn in business in 2010 and stated that an immediate "going out of business" is the best way to settle its debts because the products sitting on store shelves will lose value over time.

Ultimate's single largest debt is $64.8 million owed to General Electric Capital Corp.

Ultimate said it was driven to close because it has not secured any financing to keep its operations going, and GE Capital will not allow the electronics retail chain to use its cash collateral to buy new inventory for the stores.

Chief executive Bruce Giesbrecht sent employees an e-mail over the weekend that said, in part:

"As you all know we filed for Chapter 11 Bankruptcy protection last week. We have spent the past week working on alternatives and unfortunately determined that the best course of action is to enter an organized and orderly liquidation process."

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Ultimate has hired a Massachusetts-based firm as a consultant on the liquidations, and the consultant agreement specifies a date of no later than April 15 for the closing of Ultimate Electronics stores.

Liquidators were in Denver-area stores Sunday. Liquidation sales at stores nationwide will start as soon as Wednesday, a liquidator in the Thornton store told 9News on Sunday.

The company, which employs about 1,500 people nationwide, also filed for Chapter 11 bankruptcy in January 2005. It was eventually purchased by Mark Wattles, the founder of Hollywood Video.

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